UK Competition and Markets Authority employs AI to detect bid-rigging in public procurement

What is bid-rigging?

Bid-rigging involves collusion between bidders to either (a) artificially raise prices; or (b) agree beforehand who will win particular contracts.

With an annual total value of around £300 billion, accounting for approximately a third of all public spending, public procurement is an attractive market for companies seeking to engage in anti-competitive practices.

The AI tool deployed by the CMA is designed to detect anomalies in large-scale data and thereby identify suspicious bidding behaviour, potentially indicating collusion. 

Anti-competitive collusion in public procurement is an increasing area of concern for the CMA, which in December 2024 announced a new investigation into suspected bid-rigging activity between providers of roofing and construction services to secure contracts procured through the UK Department for Education's 'Condition Improvement Fund'.

Possible exclusion under the Procurement Act 2023

The Procurement Act 2023 (PA23), which will come into force on 24 February 2025, will raise the stakes for those involved in cartel activity and bid-rigging in public contracts.

Under the PA23, companies that engage in price fixing, market sharing (including bid-rigging), or other cartel activities risk facing mandatory exclusion from bidding for public contracts for up to five years.

Fines imposed by the CMA (or other global regulators) for cartel activity could also result in companies being placed on a debarment list, resulting in both the company and its directors being automatically excluded from all public contracts for up to five years.

Even being under investigation will create a risk under the PA23. This is because potentially infringing conduct which has not yet been the subject of an infringement decision will constitute a ground for discretionary exclusion.

Companies bidding for public contracts across all sectors should ensure that their public sector teams understand the implications of the new regime and incorporate the new risks into their compliance training.  

If your organisation (whether a contracting authority or supplier) requires any advice in relation to the PA23, please contact Nick Pimlott or Holly Johnson.

The content of this blog does not constitute legal advice and is provided for general information purposes only. Specific legal advice should be sought before taking any actions based on the content of this blog.